In an ideal accounting world, electronic transactions would never be deleted--leaving the transaction numbers in a gapless sequence.
But who lives in an ideal world? In many companies, occasional tests--whether testing a new SuiteApp you just bought, or implementing a whole new side to your business--generate data to be outright deleted, to say nothing of transactions created in error or any sort of little surprise like that.
When a transaction is deleted, the correction leaves a gap in the numerical sequence of the transactions. Some companies require gapless numbering for audit purposes, while in some countries this is simply not an acceptable accounting practice; every General Ledger (GL) transaction must have a numerical sequence in which there are no gaps. The good news is that NetSuite now offers the ability to preserve sequential numbers in GL reports even with deleted transactions.
Traditionally, Netsuite offers two options for dealing with erroneous transactions so that users do not need to delete transactions.
Option 1: Voiding Transactions
The good aspect of this option is that any transaction can be voided as long as it is in an open period. So all transaction types, such as invoices and vendor bills, can be voided. However, any transaction in a closed period cannot be voided.
Option 2: Void Transactions using Reversing Journal Entries
To enable this preference, go to Setup > Accounting > Preferences > Accounting Preferences ( Administrator ), and on the General subtab, in the General Ledger section, check the Using Reversing Journals box.
This option adds flexibility so that you can reverse a transaction in any period--whether open or closed. However, it reduces flexibility in that you can only reverse five types of transactions (checks, bill payments, payroll liability payments, customer refunds, tax payments and tax liability checks). And of course, due to Murphy’s law, those five transaction types often won’t include the type of transaction you want to reverse!
If neither of these options offer the combination of flexibility and transaction type that fits your needs, you may resort to deleting a transaction to ensure reporting accuracy. When that happens, there is a way to make sure your GL transactions maintain their numerical sequence.
New Functionality: Gapless-number Sequence
Beginning with the 2013.2 release, NetSuite allows you to create an independent numerical value to assign to each GL transaction to preserve sequential numbering. This can be applied to any transaction with a GL impact and will not apply to any transaction not having a GL impact.
For instance, Vendor Credit, Deposit, Currency Revaluation transactions will be assigned a number during the process. However, transactions like Work Orders, Opportunities, PO’s and SO’s will not have an impact on the GL so will not receive a number in the gapless number assignment process.
Some items will receive a number based on their status within the system. For instance, if an expense report has been “approved”, it has a GL impact and would receive a number. However, if the same expense report has a status of “unapproved”, it will not have a GL impact and therefore would not receive a number.
Deleted or cancelled transactions do not receive a number in the gapless sequence, however, voided transactions, or a transaction voided with a reversal will receive a number in the gapless sequence.
In a nutshell, if the transaction impacts the GL, it receives a number. If the entry has no GL impact, then no sequence number will be assigned.
Options and Preferences for GL Numbering
Like other NetSuite transactions, you can specify the initial number, prefix, suffix and minimum digits for the number sequence.
If you have subsidiaries, you can share the numbering sequence among them or allow the sequence to be independent. If a transaction has a presence in two subsidiaries, the gapless numbering functionality will assign two numbers to the transaction.
Assigning these numbers can be part of the standard period-closing procedure. (By enabling the feature, an extra step will be added to your closing checklist.) During the gapless number assignment process at the end of the period, you will have the opportunity to set your preferences for the number sequence and validate the results. Once you close the period, the sequence will no longer be accessible. After this process completes, the NetSuite GL reports will reflect the sequential numbering before submitting reports to the governing tax reporting agencies.
There are three prerequisite settings you must do to implement this feature.
1. Enable the feature
Go to Setup > Company > Enable Features > Accounting tab
2. Adjust Accounting Preferences
Go to Setup > Accounting Preferences > General tab
3. Set Reporting preferences
Go to Home > Set Preferences > Reporting/Search tab
If you choose Financials Only, the GL Audit Numbering report will be reported by period. (Along with Income Statements, Balance Sheets, Cash Flow Statements, Trial Balance Reports, Income Graphs, Expense Graph and Net Worth Graph). However, if you select Financials Only or Never, you may have problems with accounting-period-based KPI scorecard data.
During each closing process, you will have an additional item on your checklist as the very last step before completing the close. So for example, if you use a monthly period closing, then you will need to run this process on a monthly basis.
- Finalize periodic close activities
- Open GL Numbering Action
- Set number sequence
- Run number sequence process (this may take some time)
- Check the results for each sequence
- Validate the sequences before proceeding
- Mark the task complete
- To print the report:
- Run the GL Audit Report
- Filter as needed
- Print or export the report.